The information below refers to the financial records of Morrissey Brothers over a five-year period. 1997 1996 1995 1994 1993 Net income $60,000 $50,000 $40,000 $24,000 $20,000 Dividends declared $24,000 $15,000 $ 16,000 $10,000 $12,000 Closing per-share price $ 42 $ 37 $ 30 $ 35 $ 30 Number of shares outstanding 18,000b 20,000 20,000a 10,000 10,000 aThe additional stock was issued on January 1, 1995. The company repurchased 2,000 shares of its common stock on January 1, 1997. REQUIRED:

a. Compute dividends declared as a percentage of net income during each of the five years.

b. Compute the price-earnings ratio, dividend yield, and return on investment for 1994, 1995, 1996, and 1997.

c. Comment on the performance of an investment in Morrissey Brothers stock from 1994 to 1997.